Toronto Real Estate and Homes For Sale

Housing Market Goes on Roller Coaster Ride in Toronto

Some of Toronto’s prime neighbourhoods do indeed march to the beat of a different drummer. Between May 2008 and August 2008, home sales in Lawrence Park and Leaside went down by 13% and 29% respectively, compared to the same time period in 2007.
However, once again the average sale price managed to go up in both these neighborhoods in the same time period. It would appear that buyers in these two Toronto neighbourhoods have a much different view of the future of the real estate market.

In Leaside the average sale price of homes rose by 7%, while in Lawrence Park prices went up by 22%. Strangely enough, Davisville Village located besides these two neighbourhoods, also had home sales go up 1%. However, the average sale price of homes decline by 5%.
Talk about all real estate markets being local! Davisville Village and Leaside are separated only by Bayview Avenue. I would love to know if economists have coined a new term for such contradictory market conditions, such as “confused housing syndrome”. 

Why is it that home sale prices are still going up in Leaside and Lawrence Park?

In talking to a mortgage broker who handles a high volume of loans for buyers in these two neighbourhoods, he said that buyers often qualify for up to 50 per cent more than the amount of the loan for which they are applying. This partially explains why many Leaside and Lawrence Park home sellers continue to receive offers above the asking price, at a time when the Greater Toronto housing market is showing a decline in both the number of homes sold and the average sale price.

To my knowledge, these two Toronto neighbourhoods are unique in Canada.I have currently not found anything of a similar nature happening in any market, where sales are going down but prices continue to go up.

Proceed with caution
We are not out of the woods yet. With all the talk about the Chinese boom, Japan is still the second largest economy in the world, behind that of the U.S. A. Yesterday two more large Japanese home builders filed for bankruptcy, following a long list of housing developers that have sunk in the past year. It is wise for you to exercise caution and not think that our economy is immune to developments in the rest of the world.

Buying a home has become a much more complex issue, especially in central Toronto.

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Toronto Housing Market is Falling, or Is It?

The Toronto housing market has shifted to a lower gear. The last ten years have been nothing short of frenetic, and in the opinion of many, just plain insane. And there is really no other way of characterizing the buying and selling frenzy we are all so familiar with, such as a Toronto condominium at Yonge and Lawrence that sold for more than Five Hundred and Forty Thousand dollars above the asking price! This example is by no means an isolated case.

In the last seven years I have witnessed many similar sales - enough to fill a book. The trouble is that when we try to make sense of it all, there is so much information and varied opinions from experts, that it becomes next to impossible to get a clear picture of the Toronto real estate market.

Here are some recent comments on the state of the Canadian housing markets by three noted economists.

Royal Bank economist Paul Ferley thinks that 2009 will finally bring a significant drop in Canadian activity, but nothing like the U.S. collapse, with starts (new construction) down by about 15 per cent. Benjamin Tal, a senior economist with CIBC World Markets, predicts prices will continue to fall across the country with Alberta leading the way.

Read the rest of this article »

National Post Newspaper Finds Housing Grows Cheaper

I love headlines … sometimes.

A few days ago I saw this headline in the National Post, “Housing Grows Cheaper.” Cheaper than what … a Boeing 747?

As far I know, Toronto housing has not been cheap, from a buyer’s point of view for a very long time. Would most buyers consider a 60 year old, 700 square foot bungalow, in need of new bathrooms and kitchen priced at $550,000 cheap?

With all due respect to the Desjardins Group which produced the Desjardins Affordablity Index,  buyers do not have to check this index to figure out that they simply cannot afford to enter the market at these price levels. The Desjardins report warns consumers “not to get too excited about the market conditions because affordability is still close to the record low reached in 1990.” This has not been my experience. We are still way above the 1990 “record low level.”

In today’s Toronto real estate market, the only option that many buyers have is to get into a condominium, and this is a perfectly viable solution for many of them.

However, a great number of buyers would prefer something similar to the proverbial “small house with the white picket fence” instead. And this dream seems to move farther and farther away for the majority of first time buyers.

I see signs that a saner and more balanced market is starting to emerge, especially in the overheated prime neighbourhoods in central Toronto.

Housing markets, such as the one we have all been through in Toronto in the past ten years, have always divided home buyers and sellers into winners and losers. There is no middle ground. Hopefully we are starting to enter a time where we will be able to see a smile on both buyers and sellers faces.

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Toronto Housing Market is Falling, or Is It?

Are Home Sellers Obligated to Disclose If There Has Been a Death or Violence in Their Home?

Last year in Florida, the new owners of a home were shocked to learn from some of their neighbours that the home they had purchased had been the scene of multiple murders and suicide.

Florida law allows real estate companies not to disclose information about a house if such details would tend to “stigmatize” the property.

In the U.S. only half of the states have disclosure laws, Florida not being one of them.

Barry Lebow, a Toronto educator and real estate appraiser said, ”Quebec has disclosure laws, (about disclosing stigmatized information on properties) while to the best of my knowledge the rest of the country is a free-for-all.”
 
Lebow has called on Queen’s Park to enact a law requiring a vendor ( home seller) to disclose events that could stigmatize the property.

The province of Ontario and the Federal Government have enacted many new laws to protect prospective buyers when buying a home. In this case however, in Ontario it is still “buyers beware.”

Wychwood Park Tragedy – What We Can Learn From It

A recent and tragic incident in a respectable Toronto neighbourhood has come to illustrate the importance of selecting the right area, before selecting your new home. I am in no way suggesting that as a home buyer who chooses not to follow these guidelines, you may face such a similar and unfortunate outcome.

What I am suggesting is that before making any kind of decision on the type of home you would like to live in, it is wise to first choose the right neighbourhood for you.

By doing so, you can almost guarantee you will have an amenable and peaceful time living among your new neighbours.

What makes a right neighbourhood? In two words; people and their values. The comments I sometimes hear from older residents in areas such as Davisville Village or Leaside are that these “new people are not very friendly, do not acknowledge their neighbours, and are just concerned about themselves and their lives.”

According to some of these older residents, conflict arises when the “new comers” to the area either do not share or chose to ignore the values of those who lived in the neighbourhood before them. Homeownership is a highly emotional and territorial issue for some people, and such comments are a vivid example.

The Wychwood Park tragedy was a result of a clash of values by those who have lived there for years and new owners unaware of the unwritten rules of conduct.

Keep in mind that you will always be able to make modifications to your house to suit your needs and lifestyle. However, if after the fact, you realize you bought in the wrong neighbourhood, the solution could be very costly and painful.

On average, a first time home buyer remains in their first home for about seven years. With this in mind… seven years can go by very slowly if you are not happy with your neighbours or the amenities available in the area.

Read The Star article http://www.thestar.com/article/471612

Real Estate Humour

These are quotes from actual letters sent by tenants to their landlord.

• “I am writing on behalf of my sink, which is falling away from the wall.”

• “In accordance with your instructions, I have given birth to twins in the  enclosed envelope.”

• “This is to let you know that there is a smell coming from the man next door.”

• “The toilet seat is cracked. Where do I stand?”

• “I request your permission to remove my drawers in the kitchen.”

Announcing the Death of the For Sale by Owner (FSBO)

The more things change the more they remain the same, except when it comes to selling your home without an agent. When I first entered the real estate business I did not have many clients. My manager advised me to go out and meet “For Sale by Owners” (FSBO’s).

These were home owners trying to sell their homes on their own, and the manager told me they were a great source of prospects.

That was more than 26 years ago. Today I rarely see FSBO signs on lawns or their ads in the newspapers. The National Association of Realtors (NAR) in the US has been conducting surveys of home buyers and sellers, including FSBO’s, for over 50 years. Every year NAR sends an 8 page questionnaire to 150,000 consumers. Last year they received just under 10,000 responses.

This is what the survey found about FSBO’s.

• 12 % of sellers sold their home without the assistance of an agent.
• Among all sellers, 3% were FSBO sellers who knew the buyer.
• 92% of FSBO sellers sold a detached single-family home.
• For 9% of FSBO sellers, the most difficult task in selling their home was understanding and performing the necessary paperwork to complete the transaction, for 27% it was preparing the home for sale and for 9% the most difficult task was getting the price right.
• “The median home price for sellers who used an agent was $247,000; the median price for a FSBO-sold home was $187,200.”

When we look at the last bullet we see that even when the FSBO is successful, they net on average 24% less than real estate agents.

Clearly this would not be the case in every instance, but knowing these results I can only wonder why some home owners will still attempt to sell their homes without hiring a professional.

Looking at home buyers attitudes, the same survey found that:

• 91% of home buyers used the Internet to search for homes.
• 86% of home buyers used a real estate professional during their home search.

As a FSBO you do not have access to the MLS nor to all those agents who are working with buyers ready to buy a home such as yours. Today’s buyers rely almost entirely on the internet and they rarely call on newspaper ads or real estate signs.

So why do some sellers still try to sell their homes “For Sale by Owner”?

The most common answer I hear is, to save the agent’s commission. The truth is that when FSBO’s succeed in selling without an agent, they end up netting  significantly fewer dollars for their home, even after paying the agent’s fees.

I have not even touched on other issues such as home security and safety. Are you prepared to have anyone, who says the magic word “buyer”, into your house without knowing anything about them? Have you put away all your valuables? What will you do when two or three buyers show up at once? Will you let them all in and allow them to wander through your home on their own?

I could go on and on, but I will not. We are all free to make our own decisions.  This is one you should consider very carefully before setting out to “save that commission”.

I sincerely wish you good luck!

You Want to Buy a House in Toronto, May I See Your ID Please?

New Money Laundering Law Affects All Canadian Real Estate Buyers and Sellers

The next time you are involved in buying or selling real estate you may be surprised to have the real estate agent ask to see your ID.

In an effort to combat money laundering and terrorist financing, the Canadian government - through FINTRAC (Financial and Reports Analysis Centre of Canada) - has just introduced new legislation affecting all real estate transactions. The legislation applies to all individuals and Corporations.

Under this new law, the real estate industry must now keep on file the names of the individuals involved in the transaction, their address, date of birth, occupation or principal business, and the type of ID provided.

What type of personal identification do you have to show?
Your birth certificate, driver’s license, passport, record of landing, permanent resident card or other similar government-issued piece of identification. Provincial health cards are not accepted in Ontario, Manitoba or PEI.

Who does this legislation apply to?
Real estate brokers must now complete an Identification Record with each and every real estate sale at the time of the transaction.

When does this new legislation take effect?
As of June 23, 2008, all real estate brokers (sales representatives, agents) must keep a Receipt of Funds Record and identify the client who provided the funds.

What about my personal privacy?
The new legislation  now deems this type of information “necessary” for the purposes of identification.

What if there are no real estate agents involved?
In that case the full responsiblity of collecting this information is placed on the lawyers acting on behalf of the buyer and seller.

What are the Realtors’ responsibility regarding my private information?
Realtors are responsible for protecting all personal information collected from you as part of the FINTRAC Compliance Process against loss, theft, unauthorized access, disclosure or copying.

Non-compliance penalties by the real estate industry are quite serious, with up to five years in prison and fines up to $2 million for each offence.

Should You Wait for the Market to Bottom Out Before Buying a Home in Toronto?

A quick look at the headlines suggests that the Toronto housing market will continue to slow down. The question is whether waiting for the market to reach bottom is a smart idea. Here are four reasons to buy now and four reasons you may want to wait.

Four reasons you should buy now

1. If prices are relatively stable. If home prices in the neighbourhood where you want to live are steady and there is no significant drop, then the only risk you take by buying now is that you miss the bottom by a small percentage.

2. If you are planning to stay in the home you buy for several years. Unless the entire world’s economy goes into a tailspin, most economists agree that if you buy now you will come out ahead when the market rebounds.

3. If your current rent payment would equal a mortgage payment. If you are able to buy now, you will be building your own equity rather than paying your landlord’s mortgage through your rent payment.

4. If you have found the perfect home in the right neighbourhood. You have been looking long and hard and you realize it’s going to be difficult to find another house just like this one. Everything is to your liking including the schools, neighbours, etc. You also know that if the market were brisker you definitely would have a lot more competition from other buyers.

Four reasons you should not buy now

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How to Get the Most for Your Home in a Slowing Toronto Real Estate Market - Part Three

Here are the last two most common errors that you must avoid, in order to get a higher price when selling your home in a softening real estate market.

•  Do not let your emotions gain control of you

The offer you have in front of you is quite good. You are almost there.  However, the buyers want those curtains that your spouse had custom made. This is not the time to lose the offer over “depreciated curtains”. Keep an eye on the big picture.

•  Failure to set the correct price

Nothing will turn your buyers off faster than your having an asking price far above the true market value. The internet has allowed both buyers and sellers to gain considerable knowledge about property values.

You would be making a huge mistake by saying … “they can make an offer”.  Most of us are simply too busy to play that type of game. By placing your asking price within 2 to 3 percent of your home’s true market value, you have infinitely better chances of receiving good realistic offers.

Today’s buyers are very different than they were 15 years ago before the arrival of the internet. Generally buyers are well informed  and are only looking at those listings that are priced correctly.

Save yourself, your agent and the buyers a lot of time. Today there are few unsuspecting, uninformed buyers.